Arbeitspapier

Benefit Duration, Job Search Behavior and Re-Employment

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This paper studies how the potential duration of unemployment benefits affects individuals' job search behavior and re-employment outcomes. We exploit an unexpected reform of the German unemployment insurance scheme in 2008, which increased the potential benefit duration from 12 to 15 months for recipients of age 50 to 54. Based on detailed survey data and difference-in-differences techniques, we estimate that one additional month of benefits reduces the number of filed applications by around 10% on average over the first two months of unemployment. Treatment effects on the reservation wage are positive but statistically insignificant. In a complementary analysis, we use social security data to investigate how the reform affected re-employment outcomes. The difference-in-differences estimates yield an elasticity of 0.24 (0.1) additional months in unemployment (nonemployment) per additional month of potential benefits. A cautious back-of-the-envelope calculation reveals substantial returns to early search effort.

Language: Englisch

Bibliographic citation: Series: CESifo Working Paper ; No. 8194

Classification: Wirtschaft
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Unemployment: Models, Duration, Incidence, and Job Search
Mobility, Unemployment, and Vacancies: Public Policy

Subject: unemployment insurance
job search
re-employment outcomes
natural experiment

Event: Geistige Schöpfung

(who): Lichter, Andreas
Schiprowski, Amelie

Event: Veröffentlichung

(who): Center for Economic Studies and ifo Institute (CESifo)

(where): Munich

(when): 2020

Handle: http://hdl.handle.net/10419/216590

Last update: 10.03.2025, 11:42 AM CET

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Object type

Arbeitspapier

Associated

Lichter, Andreas
Schiprowski, Amelie
Center for Economic Studies and ifo Institute (CESifo)

Time of origin

2020

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